BillerudKorsnäs_CMD NORDIC RESULTS & TRENDS IRO INSIGHT 2015

Transcription

1 BillerudKorsnäs_CMD NORDIC RESULTS & TRENDS IRO INSIGHT 2015

2 TABLE OF CONTENT ABOUT THE STUDY p. 2 PROFILE OF COMPANY p. 3 PROFILE OF IRO p. 4 IR-DEPARTMENT p. 6 COMPENSATION AND BONUS p. 10 ACTIVITIES TOWARDS INVESTORS & ANALYSTS p. 12 CSR / SUSTAINABILITY p. 14 SUMMARY / KEY FINDINGS p. 15 CONTACT p. 17 1

3 ABOUT THE STUDY For the third time, Regi has surveyed those working in this critical function and examined how the role is evolving. The main purpose of the study is to offer IROs an overview of current trends in Nordic IR practice. Our anecdotal evidence, as well as data that follows, clearly supports the idea that the IR function is continuing to expand in importance, relevance, and value, as reflected by compensation rates. To provide a clearer picture of Nordic IROs, Regi collected responses from 105 investor relations officers in Nordic companies. The majority came from large- (53%) or mid-cap (37%) companies, and small-cap 10%. Their responses cover information from the calendar year Have a pleasant read! 2

4 PROFILE OF COMPANY STOCK EXCHANGE COMPANY SIZE 16% 19% 10% 21% 53% 37% 44% Oslo Børs NASDAQ OMX Helsinki NASDAQ OMX Stockholm NASDAQ OMX Copenhagen Small cap Mid cap Large cap ANALYST COVERAGE TOP MANAGEMENT ENGAGEMENT IN IR 11% 23% 12% 3% 51% 3% 46% 13% 13% 25% >25 No sell side coverage Not engaged at all Engaged Very engaged 3

5 PROFILE OF IRO According to the 2015 survey data, the typical Nordic IRO: IS MALE (64%) IS 40 TO 49 YEARS OLD (42%) HAS FINANCIAL BACKGROUND (74%) HAS BEEN WORKING WITH IR FOR 6 TO 8 YEARS (24%) AVERAGE BONUS IS 10% TO 29% OF THE ANNUAL INCOME AVERAGE SALARY RANGE IS 8000 EUR TO 9900 EUR PER MONTH 4

6 PROFILE OF IRO AGE 2% GENDER 22% 1% 33% 36% 64% 42% < >60 Female Male IR EXPERIENCE PROFESSIONAL BACKGROUND 23% 9% 10% 2% 16% 7% 1% 14% 20% 24% 74% 0-1 year 2-3 years 4-5 years Financial Marketing Other Communication /PR Media 5

7 IR-DEPARTMENT Now we know who the typical IRO is. But what does the IRO do and how is the IR function organized? In the Nordic region the average size of an IR function is 2 people. This varies between market cap and country. We can clearly see that majority of small cap companies assign IR responsibility to other key personnel, such as CFO or CEO. In fact many of small cap companies have done exactly this. When looking at mid-cap we start to see clearly dedicated IROs, whose job is to manage the investor relations full time. 51% of the companies have performance measurements of the IR-function. Number of 1-to-1 meetings with investors and perception studies (ranking list etc.) are most used to measure performance of the IR-function. 6

8 IR-DEPARTMENT IR-TEAM EMPLOYEES 4% 13% 14% 3% 33% DOES YOUR COMPANY MEASURE PERFORMANCE 47% 53% 33% < 1 person 1 person 2 people 3 people 4-5 people > 5 people Yes No HOW DO IR-FUNCTIONS MEASURE PERFORMANCE IRO REPORTS TO 5% 12% 27% 12% 7% 28% 14% 28% 14% 53% 1-to-1 meetings with investors Perception studies (ranking list etc.) The company s results 1-to-1 meetings with sell side analysts Shareholder composition Other CEO CFO Head of Communications Other 7

9 IR-DEPARTMENT Our data also indicates that IROs mainly report to CFO or CEO. The main spokesman regarding financial issues typically is the IRO at large-cap companies, while the results clearly show that CFO takes on a larger part of the work at mid-cap companies. For small-cap companies the CEO is most often the main spokesperson. The average IRO is not part of the formal management group, however it is not unheard of. One in every four IROs is part of the formal management group in mid- and large-cap companies. Data indicates that the involvement of IR in top management can be an important factor for the success of the IR-team. However, in-house IR-teams rely on IR consultancy. Data indicates that 58% of Annual Report and 45% Development of Website (IR) are performed by outside vendors. 8

10 IR-DEPARTMENT USE OF EXTERNAL IR COUNSEL WHICH FUNCTIONS RELY ON EXTERNAL IR CONSULTANCY 3% 9% 18% 36% 4% 6% 7% 64% 14% 6% 8% 12% 7% 6% Yes No Annual Report IR Strategies Company Presentations Meetings (CMD, AGM, etc.) Regular updates of website (IR) Crisis Communication Other Financial PR Quarterly Reports Roadshows Development of website (IR) Conferences calls/web casts Do not know 9

11 COMPENSATION AND BONUS Nearly all top IROs are granted some type of bonus, and a long term incentive plan remains a key component of total compensation. Majority of IROs receive a 10%-29% bonus of annual base salary, the highest bonus reported is 100% of annual base salary. The bonus is mainly affected by the company s- and personal key performance indicators, but also the result of the company. Base salary range from 4000 EUR to EUR. Average base salary range from 8000 EUR to 9900 EUR. Notably, 16% of IROs reported salaries up to EUR to EUR, majority consisting of large- and mid-cap companies. IR has not been immune to pressure to increase efficiencies across all enterprise functions. Departmental budgets varies across cap, 24% of largecap companies have an annual budget that exceeds EUR, while 50% of small-cap companies have a budget level of < EUR. 10

12 COMPENSATION AND BONUS MONTHLY SALARY (EUR) Do not know want to > EUR EUR EUR EUR EUR EUR EUR < EUR BONUS AFFECTED BY FOLLOWING PARAMETERS POTENTIAL LEVEL OF BONUS (%) Do not want to answer >100 % of annual base salary % of annual base % of annual base salary % of annual base salary % of annual base salary < 10 % of annual base salary % 5% 4% 9% 2% 22% 30% 1-to-1 meetings with investors and sell side analysts Perception studies (ranking list etc.) Shareholder composition The company s Key Performance Indicators Personal Key Performance Indicators The company s result Other 11

13 ACTIVITIES TOWARDS INVESTORS & ANALYSTS The main stakeholder for your company and the people you are most frequently in contact with are the investors and analysts that cover your company. The most essential part of the IRO s day-to-day work is to maintain good relations with these groups. Investment analysts and portfolio managers gain confidence in an IRO who is able to convey not just information, but also effectively tell the company story / equity story in such a way that provides insight and understanding. The average range of estimated investor meetings held the past 12 months is , however 18% has held more than 300 investor meetings. 30% plan to conduct more investor meetings over the coming year. Interest from investors to contact your company has increased by 49%. IROs are most likely to actively target peer holders and geographic diversity, both belonging to nonholding investors. 12

14 ACTIVITIES TOWARDS INVESTORS & ANALYSTS HOW DO IR WORK TO GAIN MORE ANALYST COVERAGE 18% 7% 12% 14% 15% 34% Allocate more time to meetings with analysts Allocate more time to meetings with investors Focus on CMDs Focus on roadshows Focus on getting media coverage/visibility Other HOW OFTEN IS CMD ARRANGED 2% 20% 10% 9% 2% 27% 30% Every year Every second year 2-3 years frequency Less often, when there is a need for a CMD Never Do not know Other Data indicates that 48% work actively to gain more analyst coverage, mainly through allocating additional time to meetings with analyst (34%) and investors (15%), but also increased focus on roadshows and CMDs. 57% of all companies organize CMDs every year or every second year. Most significant is this for large-cap companies. Q&A, mingle and lunch- or dinner meetings are the most offered activities during CMDs. Few IROs truly embrace Social Media as an investor communication tool, 61% have a neutral or negative view of using social media. Insufficient resources, management does not see the value or lack of investor demand are main reasons why not adopting Social Media. 13

15 CSR / SUSTAINABILITY The latest survey data affirms that a vast majority of Nordic IROs at publicly traded companies think Corporate Social Responsibility is important for their company, 36% believe it s very important. 39% of IR-teams handle CSR work as part of the IRfunction. 61% have a devoted CSR / Sustainability function. 35% use integrated CSR- and financial reporting while 65% don t. CSR IMPORTANCY 6% 36% 24% 34% IS CSR PART OF IR-FUNCTION 39% Yes 61% No Not important Less important Important Very important INTEGRATED REPORT 35% 65% Yes No 14

16 SUMMARY / KEY FINDINGS IRO BACKGROUND Serving as an Nordic IRO today increasingly means being stepped in finance. A heavy concentration of respondents have corporate finance (74%) as professional background. Most IROs are between years old. The gender gap appears to be closing a little bit: 37% or IROs are women, up from 35% two years earlier. SALARY & BONUS The latest survey data shows that a majority of Nordic IROs at publicly traded companies have an average monthly base salary from 8000 EUR to 9900 EUR. Notably, 9% of IROs reported salaries EUR per month, majority consisting of large- and mid-cap companies. Majority of IROs receive a 10% to 29% bonus of annual base salary. CSR / SUSTAINABILITY Corporate Social Responsibility is important for their company, 36% believe it s very important. 39% of IR-teams handle CSR work, and CSR is part of the IR-function. 35% use integrated CSR-and Financial Reporting, and 65% don t, 33% of those who don t plan to do so. Our anecdotal evidence, as well as data, clearly shows that CSR is more important than ever. 15

17 SUMMARY / KEY FINDINGS ANALYST COVERAGE Getting analytical coverage is a worthy goal of a public company. Data indicates that 48% work actively to gain more analyst coverage, mainly through allocating additional time to meetings with analysts (34%) and investors (15%), but also increased focus on roadshows and CMDs. INVESTOR MEETINGS 30% of IROs plan to conduct more investor meetings over the coming year. Interest from investors to contact your company has increased by 49%. IROs are most likely to actively target peer holders and geographic diversity, both are non-holding investors. SOCIAL MEDIA Survey affirms that investor relations (IR) professionals are currently not universally using social media. 67% of IROs haven t fully adopted social media in their communication with the financial markets. Although, ongoing reassessment, evolving technologies and the inevitable increase in interest and participation by the investment community is changing agendas and usage. 16

18 CONTACT Regi Research & Strategi Lilla Nygatan Stockholm Johan Chasseur Director of Business johan.chasseur@regi.se Oskar Fernö Project Manager oskar.ferno@regi.se Karin Bengts Production Manager karin.bengts@regi.se 17